Consumer Advocates Wary of Federal Insurance Regulation Plans
National News • April 16, 2009
Some of the nation's insurance consumer advocates are wary of current proposals for federal regulation of insurance being passed around in Washington. They prefer taking their chances with an ...
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Subject: Insurance Journal Online Headline Is Misleading
Posted On: April 16, 2009, 8:07 pm CDT
Posted By: EDGE
Comment:
The headline of the April 16, 2009 Insurance Journal Online article, "Consumer Advocates Wary Of Federal Insurance Regulation Plans " is misleading. The consumer advocates quoted in this article, liaisons for the NAIC, are not endorsing the current state-by-state insurance regulatory system.. Far from it.
These well-respected consumer advocates are seeking the best regulatory environment for insurance consumers, whether it be state regulation or federal regulation. They are wary of the current regulatory proposals for federal oversight, which everyone will agree, are either ill-defined, or which propose an Optional Federal Charter (where insurers could choose to be regulated either by federal or state regulators). Most will agree the OFC state and federal dual regulatory concept is much too cumbersome and confusing. After the regulatory failure with AIG's financial products unit in London, and the huge international financial ramifications, Congress is clearly looking to a federal agency to coordinate and oversee the insurance industry.
In fact, without putting words in their mouth, I believe the two consumer advocates quoted would probably be the first to endorse the passage in Congress of a uniform federal insurance law (if it could be constructed), as long as it would be fair for consumers, offering more consumer protection and enforcement than is currently provided by the state regulatory system. A cost-effective federal insurance law, applicable to all states, adopting national standards, would have a sole federal regulator at the head, and would take the best of state insurance law, deputizing state insurance departments, allowing states or regions to add legislation or regulations to cover specific state or regional issues.. Provided there was enough pro-consumer detail in the proposal, most consumer advocates would endorse a federal oversight law.
This article should have been headlined "Some Consumer Advocates Wary of Current Federal Insurance Regulation Plans" . Adding the word "Some" and the word "Current to the headline would have been closer to the opinions expressed. Or, reversing the emphasis, this article could have been headlined "Consumer Advocates Say Proper Federal Insurance Regulation Not on Table -- Yet"
Subject: Insurance Journal Online Headline Is Misleading
These well-respected consumer advocates are seeking the best regulatory environment for insurance consumers, whether it be state regulation or federal regulation. They are wary of the current regulatory proposals for federal oversight, which everyone will agree, are either ill-defined, or which propose an Optional Federal Charter (where insurers could choose to be regulated either by federal or state regulators). Most will agree the OFC state and federal dual regulatory concept is much too cumbersome and confusing. After the regulatory failure with AIG's financial products unit in London, and the huge international financial ramifications, Congress is clearly looking to a federal agency to coordinate and oversee the insurance industry.
In fact, without putting words in their mouth, I believe the two consumer advocates quoted would probably be the first to endorse the passage in Congress of a uniform federal insurance law (if it could be constructed), as long as it would be fair for consumers, offering more consumer protection and enforcement than is currently provided by the state regulatory system. A cost-effective federal insurance law, applicable to all states, adopting national standards, would have a sole federal regulator at the head, and would take the best of state insurance law, deputizing state insurance departments, allowing states or regions to add legislation or regulations to cover specific state or regional issues.. Provided there was enough pro-consumer detail in the proposal, most consumer advocates would endorse a federal oversight law.
This article should have been headlined "Some Consumer Advocates Wary of Current Federal Insurance Regulation Plans" . Adding the word "Some" and the word "Current to the headline would have been closer to the opinions expressed. Or, reversing the emphasis, this article could have been headlined "Consumer Advocates Say Proper Federal Insurance Regulation Not on Table -- Yet"